Full report - SGI Canada

11. Investment Earnings
The components of investment earnings are as follows:
2010 2009
(thousands of $)
Income tax expense differs from the amount that would be computed by applying the federal and
provincial statutory income tax rates to income before income taxes and non-controlling interest. The
reasons for the differences are as follows:
2010 2009
(thousands of $)
Net realized gain on sale of investments $ 17,350 $ 2,272
Interest 13,123 13,918
Premium financing 4,306 3,572
Pooled fund distributions 2,496 2,371
Dividends 2,073 1,873
Investments accounted for on the equity basis 205 206
Interest on net investment in capital lease 44 95
Investment write-downs (464) (3,965)
Total investment earnings $ 39,133 $ 20,342
Investment expenses (850) (770)
Net investment earnings $ 38,283 $ 19,572
Income before income taxes and
non-controlling interest $ 51,345 $ 53,387
Combined federal and provincial tax rate 30.23% 29.54%
Computed tax expense based on combined rate $ 15,522 $ 15,771
Increase (decrease) resulting from:
Changes to enacted tax rates 166 45
Non-deductible expenses for tax purposes 32 33
Investment earnings not subject to taxation (13,249) (14,809)
Taxable gain on sale of investments
accounted for on the equity basis 86 —
Other (14) (37)
Investment write-downs by category are as follows:
2010 2009
(thousands of $)
Canadian common shares $ (370) $ (2,127)
U.S. common shares — (479)
U.S. pooled equity fund — (668)
Non-North American pooled equity fund (94) (691)
Total investment write-downs $ (464) $ (3,965)
Total income taxes $ 2,543 $ 1,003
The tax effects of temporary differences that give rise to significant portions of the future tax assets and
future tax liabilities are presented below:
2010 2009
(thousands of $)
Future income tax assets
Provision for unpaid claims $ 2,668 $ 2,507
Other 24 24
Total future income tax assets 2,692 2,531
12. Income Taxes
The Corporation’s provision for (recovery of) income taxes is as follows:
2010 2009
(thousands of $)
Current $ 2,919 $ (204)
Future income tax liabilities
Investments 333 472
Unpaid claims recoverable from reinsurers 577 653
Total future income tax liabilities 910 1,125
Net future income tax assets $ 1,782 $ 1,406
Future (376) 1,207
Total income taxes $ 2,543 $ 1,003
80 | 2010 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2010 | 81